Randy Hunt, local CPA and 5th Barnstable District Massachusetts state representative, regularly posts his points of view regarding local, regional and national issues. (Boring!) But most of the time he just writes humorous stories. No ads. No clutter. Everything is copyrighted by Randy Hunt. To replicate an article, just email for permission.

Sunday, January 3, 2010

Would you like some pornography with your $50 coin?

I saw this interesting ad on TV for a $50 buffalo tribute proof coin. I remember the U.S. Mint creating a $50 gold bullion coin in 2006 that sold for between $800 and $900 back then and I’ve seen it offered on Home Shopping Network and all over the Internet for double and nearly triple that.

The word “tribute” means the same thing in the world of collectors’ coins as it does in the world of 1960s and 1970s rock bands. When you go see Creedence Clearwater Revisited, don’t expect to get John Fogerty’s signature on your program. And don’t expect to see an equivalent concert.

Here is a portion of the narrative that makes you want to start spilling your credit card information to a perfect stranger on the phone. The key words to focus on are “copy” and “clad.”

“Look closely at history in the making. This $50 buffalo gold piece is the purest gold coin ever struck by the U.S. government. It’s the first U.S. coin ever struck using point 9-9-9-9, that’s four nines, pure 24-carat gold. Its design is based on the famous buffalo nickel of 1913 to ’38.

“Now you can reserve your own copy of the $50 gold buffalo, clad in 31 milligrams of pure gold. National Collector’s Mint’s private, non-monetary minting, recreates James Earl Fraser’s American Buffalo, against a mirror-like background on one side and his iconic Native American Indian head stands out in stunning relief on the other.”

There are several points of interest in this television commercial and a major behind-the-scenes story that you will appreciate knowing.

The first portion of the ad features video of the real gold bullion coin complete with an accurate description of that $1000-plus investment. That, of course, is not what’s being sold here.

What is being sold is a tribute copy of the U.S. Mint’s coin, clad in 31 milligrams of 24-carat pure gold. And you’d better hurry, because the price of $19.95 plus $4.95 shipping and handling can only be guaranteed for seven days due to the spiraling cost of gold.

Which begs the question: Just what’s the value of 31 milligrams of gold? Using the Google weight conversion tool, I converted 31 milligrams to 0.000996673144 troy ounces. That rounds conveniently to 1/1000 of a troy ounce, the standard measure for gold, silver and other precious metals.

Then I checked the price of a troy ounce of gold on the Wall Street Journal website and, as of 5:14 p.m. EST on December 31, 2009, it was $1,097.80. That also rounds conveniently to $1,000, making the value of the gold on this coin about a buck. (For you accuracy buffs, it comes out to exactly $1.09.)

Okay. I’m buying a gold coin for $25 that has $1.09 of gold content. Yes, now I see why the urgency. If the price of gold doubles over the next week, I’ll get a whopping $2 of gold for a mere $25.

I’m guessing that the entire cost of production, packaging and shipping must be less than $5. Why? Because there is a 30-day money-back guarantee. You pay to ship it back to National Collector’s Mint and they’ll refund your $19.95. Shipping and handling (and profit) of $4.95 is not refundable.

I’ve probably not told you anything that you wouldn’t have figured out for yourself if you spent a few minutes thinking about it. But here’s something that will go unnoticed by almost everyone: the certificate of authenticity.

Yes, it certifies the size, total weight, and gold content of the coin and looks really official, but look who signed it. Barry M. Goldwater, Jr. Wait a second. That’s an uber-famous name.

People my age and older remember his dad running for president in 1964 and getting his clock cleaned by LBJ. He won the 52 electoral votes of Arizona and the southern states from Louisiana to South Carolina, except for Florida. Johnson won the rest (486).

And who owns National Collector’s Mint? Well, none other than Avram Freedberg, the owner of Dirty Dick’s Dynamite Discount Den, a company in Stamford, Connecticut, that was raided in 1988 for selling pornography. After agreeing to close the business and paying a $600,000 fine, Freedberg avoided jail time and moved on to this new venture.

In 2004, his company marketed Freedom Tower Silver Dollars (coincidentally, also sold for $19.95) which were purportedly made from silver bars recovered from the rubble of the World Trade Center collapse. See what a New Times opinion piece and article had to say about Freedberg's attempt to capitalize on the September 11, 2001 event.

Freedberg followed up with a presidential coin featuring Barack Obama on one side and Abraham Lincoln on the other. That minting was even more premature than the Nobel Peace Prize Committee’s decision last year, although both share a common element: naked opportunism.

Still tempted to cash in on this excellent deal for investors and collectors?

Anonymous, I worry about seniors who used to be quite capable but are becoming targets of these marketeers because they lack the clarity they once had. My mom is in the advanced stages of Alheimers and no longer has a phone. There was a time a few years ago, however, when she did get calls and okayed a scam auto insurance switcheroo.

Unfortunately my wife and I were recently introduced to this *&%*(&(*&( business tactics when we decided to buy the $50 bufffalo tribute proof for our nephew for Christmas because he saw it on TV and wanted. We called them up, and going through a whole ordeal with their automated phone system in which it ordered the wrong coin.(It ordered the $223 buffalo proof instead of the $19 one.) We called the credit card company to tell them not to release the funds to them. CC company said that the transaction hadnt been sent to them yet but they would flag it and not let it go through. In the meantime, we also tried calling customer service to speak to a live person but they were closed. So we thought everything was taken care of and then ordered the $19 coin. We still tried calling them to speak with them directly to confirm that we did not want the expensive coin. To no avail. In the meantiment we recieved the $19 coin and thought that was it. On Jan 26 we received a package with the large coin for $223 dollars which was charged to our cc.

After waiting 50 minutes on the phone today, I findly got to speak with someone in customer service and they said that I would have to return the large coin and once they receive it they would credit us the money on the cc.We'll see what happens.

Hey Randy, the customer service rep said we have 30 days to send it back once we receive it. Yes, I am not overly confident that we will get our credit. See what happens. Sending it out today. Will let you know.

Randy, figured i would follow up and let you know how i made out with National Collectors Mint. I sent the coins back on Thursday 2/4,with a signature confirmation receipt requested, postal service left notice on Saturday 2/6, obviously no one at the office, they accepted package on Monday 2/8, and our checking account was credited back the money on 2/9. I was surprised. We did follow all their mailing directions, which werent too bad, but I have a feeling if it werent followed to the T, they would have given us some problems... anyway I would never use them again...

I was scammed by this company by their misleading advertisement and my credit card was charged twice, cleverly in 2 subsequent months, when I was baited by the 2011 $50 Gold Buffalo tribute proof commercial on TV. The reason I am writing this because I saw the commercial on TV again this morning and wounds of being cheated became fresh....

I monitor all comments. As long as there are no personally defamatory statements and/or foul language, I'll post your comment. For this reason, your comment will not appear instantaneously. To comment without registering, choose Name/URL and type a screen name (or your real name if you like) into the Name field. Leave the URL field blank.

I hope I made you smile.

About Me

A certified public accountant for 30 years, Randy has his practice in the beautiful, seaside town of Sandwich, Massachusetts.
Active in many local organizations, Randy is the state representative for the Barnstable & Plymouth District and advocates for conservation of Cape Cod, public safety and independence from foreign energy sources.